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The disputed islands in the East China Sea. Photo: AFP

Diaoyu Islands dispute about resources not land

The dispute over the Diaoyus is about more than national pride - ownership of the rocky archipelago will give access to rich resources

The disputes are all over the map. But the long-standing row between Beijing and Tokyo over the Diaoyu Islands is not simply a question of geography and national pride, but a battle for resources, economic benefits and strategic interests.

The battle is also about national status and influence that is not just limited to Asia but affects the global stage, pitching the two most economically and militarily powerful states in the region against each other.

For the United States and its regional allies, the disputes are a case study in containing a rising power; for China, it is also a test run to accomplish its newly declared ambition of becoming a "maritime power", as stated by President Hu Jintao in a keynote policy document at the recent 18th party congress.

The tiny, uninhabited archipelago, know as the Senkaku Islands in Japan, lies between Taiwan and the southern Japanese island of Okinawa and is under Japanese control, which is challenged by Beijing and Taiwan, who accuse the Japanese of occupying it during the 1895 Sino-Japanese war.

"The islands are seen as possessing much more strategic, military and economic value because they are about sea-lane security and they may hold vast stocks of hydrocarbons and fish," said Professor Jin Canrong , a security expert and associate dean of Renmin University's school of international relations.

The dispute might have existed for a long time, but its importance has become clear only in recent decades as both Asian economies share similar constraints on their patterns of development. Both are global manufacturing giants which rely on imports of resources and exports of manufactured goods, for which maritime security is crucial.

From the melting and resource-rich Arctic to the eastern Mediterranean and the South Atlantic to the East China Sea, legal wrangling, diplomatic posturing and military sabre-rattling are all on the rise.

But the present row over the Diaoyus seems one of the riskiest conflicts so far. It puts two of Asia's most powerful states at loggerheads, for now and for years to come, as compromises and solutions are in short supply - although most experts believe talk of outright conflict might be overstated, at least for now.

Despite the fact both governments agreed "to work together to make the East China Sea a 'Sea of Peace, Cooperation and Friendship'" in a joint statement issued in May 2008, their relations have faltered badly, especially since Tokyo's provocative move to nationalise the island in September. This led to both nations having armed vessels loitering around the islands for weeks until recently - sending diplomatic temperatures soaring and leading to international calls for cool heads.

In truth, the international tussles are not over the land itself, but what is around it and what lies below the surface.

First of all, establishing ownership of rocks in the middle sea is a way to both affirm and vastly increase a country's so-called exclusive economic zone (EEZ) - the stretch of sea in which a particular state has the exclusive right to exploit and extract natural resources.

The EEZ that extends from the disputed islands can be exploited for fisheries. Taiwanese and mainland fishermen have long fished there.

Under the United Nations' International Convention on the Law of the Sea, the EEZ of a nation stretches 200 nautical miles from that nation's continental shelf, or to the median line between two nations. In the East China Sea, the widest point of separation between China and Japan is 360 nautical miles.

Dr Sun Shao-cheng, an energy expert with Taiwan's Tamkang University, said the two countries adopted different criteria for their concept of an EEZ.

"Japan took the median line principle, but China insisted on configuring its EEZ based on the prevailing continental shelf in the shallow East China Sea," Sun said.

The bounty beneath the sea is potentially rich. Untapped oil reserves are estimated at 100 to 160 billion barrels, according to the US Energy Information Administration. Estimates for the South China Sea, where a host of nations, including China, claim territory, vary from 28 billion to 213 billion barrels of potential oil reserves.

According to the relevant prospecting data, the oil and natural gas reserves in the East China Sea will be enough to meet China's needs for at least 80 years. Moreover, according to Japan's Ministry of Land, Infrastructure, Transport, and Tourism, there is enough manganese in the waters near the Diaoyus to meet Japan's needs for 320 years, enough cobalt for 1,300 years, enough nickel for 100 years, and enough natural gas for 100 years, not to mention other mineral resources and plentiful fish.

The Diaoyu Islands are situated to the west of the Okinawa Trough, the deep ocean basin which China argues separates its continental shelf from that of Japan. But if the Diaoyu Islands are deemed to belong to Japan, China and Japan will share a continental shelf. If the continental shelf is delimited in accordance with the provisions of the International Convention on the Law of the Sea, China will lose a lot of territorial waters - and the resources underneath.

The most optimistic outlook suggests that should either nation take control of these maritime resources, it would transform itself from a country with limited natural resources into a resource powerhouse.

Both China and Japan are major energy consumers and importers, and the stakes have been building as the energy demands of each nation grow increasingly acute.

Sun says that, along with political and historical mistrust, the deepening competition for energy resources will lead to further deterioration in relations between China and Japan.

"Occasional friction and even heated conflicts are likely because energy competition matters are complicated by historical hatred, political distrusts, and territorial disputes," Sun concluded in his academic thesis: .

Major General Luo Yuan , a well-known strategist with the People's Liberation Army, says the Diaoyu issue is not just a matter of losing or maintaining Chinese territory. China's security and development is also at stake.

"Behind the dispute over sovereignty, there is also the struggle for deep-seated economic interests and geopolitical strategic interests," said Luo, a retired PLA general known for his hawkish view on territorial disputes.

Neither side appears willing to show weakness as any perceived concessions could have a negative impact on other future maritime agreements - both nations have long-standing territorial disputes with other neighbours. Japan has border disputes not only with China, but also with Russia and South Korea. The mainland and Taiwan have had territorial disputes with other Southeast Asian nations over chains of islands in South China Sea.

Dr John Lee, Michael Hintze fellow for energy security with Sydney University's Centre for International Security Studies, said China seemed to have taken the view that its various claims in the East and South China Sea were indivisible.

"That is, relenting or compromising on one claim will weaken the moral and legal status of its other claims," Lee said.

"In doing this, Beijing takes the view that any compromise on the Diaoyu Islands, for instance, will weaken its claims in the South China Sea, and therefore exacerbate its sense of strategic encirclement by US forces and [US] allies in the maritime domains of the region."

Lee said that because of this Chinese attitude "countries such as Japan had responded by treating any compromise on their part as potentially ceding significant strategic ground to China in the region".

"Tokyo and Beijing may both conclude that whoever prevails in the Senkakus will have a better chance at prevailing in these other disputes," writes Taylor Fravel, an associate professor of political science at the Massachusetts Institute of Technology and author of .

Zhang Wenmu , a professor in the Centre for Strategic Studies at the Beijing University of Aeronautics and Astronautics, said that the level of resource shortages worldwide was proportional to the level of tension between big powers.

"Where there is a scarcity of resources, geopolitics is at play. The latter has a direct bearing on China's survival and development since the country's oil consumption is almost 50 per cent reliant on imports," said Zhang, who wrote books including and .

"China cannot have control over development goals without corresponding control over the resources to fuel the economy," Zhang writes in his recent research report, .

Chinese strategists have called for the country to become a maritime force to accommodate its fast development, while there have been claims that military and security concerns also dominated the mindset of policymakers and strategists in both Tokyo and Beijing.

"Those who control the islands will prevail militarily in future conflict," Luo told state broadcaster CCTV, in a special programme, contributing to China's newly claimed ambition to become a "maritime force".

But Professor Lin Chong-pin, a military expert and Taiwan's former deputy defence minister, dismissed such a view.

Lin, who worked at Taiwan's Tamkang University until recently, said that not only were the uninhabited rocks unsuitable for the construction of any major military facilities, he believed Tokyo was unlikely to risk repercussions by exploring any military use in the near future.

Chinese officials and scholars say the United States has been playing a crucial role in the escalation of Diaoyu row following US President Barack Obama's "policy pivot" to Asia in 2009, which is intended to give Washington a long-term strategic advantage and leadership in the region.

"It is no longer a secret that it is in the US interest for countries in this region to quarrel with China, but not to fight with China," said Chen Jian , China's former ambassador to Japan and now the dean of Renmin University's school of international relations.

By the same token, the US-Japan strategic blockade against China will be pushed forward from the Japanese archipelago to the west of the middle line between the two countries. Thus, China must contest every single inch as far as the Diaoyu Islands, part of China's integral territory, are concerned, Chinese military strategists say.

Another factor is that the US recognises Japan's administrative control of the islands, so it is said to be bound by Article V of the Japan-US security treaty to consult with Japan "whenever the security of Japan or international peace and security in the Far East is threatened".

While both US Secretary of State Hillary Rodham Clinton and US Defence Secretary Leon Panetta told Beijing that Washington maintained a neutral stance on the sovereignty issues, they made the point that the Diaoyu islands were covered by the US-Japan treaty.

Sun said that Beijing perceived the deployment of US missiles in Japan, US involvement in the dispute between the Philippines and China over islands in the South East China Sea and the aggravation of the conflict over the Diaoyu islands as elements of a US attempt to deny China its legitimate rights to resources and the peaceful development of Chinese commercial interests in the region.

Taiwan, for its part, finds itself in an embarrassing position and has refrained from joining the row, with President Ma Ying-jeou calling for talks with Tokyo on fishing rights near the islands.

"What can Taiwan do besides calling for consultation?" Lin said. "A peace treaty among nations to allow common development is the best option for Taipei."

As the discrepancy between the territorial status quo and the political and economic balance of power becomes more glaring in East Asia, the potential for conflict will only increase.

A US delegation which in October met Japanese Prime Minister Yoshihiko Noda, Vice-Premier Li Keqiang , who is expected to become premier in March, and both countries' foreign ministers, said that while neither side wanted a confrontation, a mistake or miscalculation could escalate into a military face-off.

According to realist theories of international politics, discord between a declining America and an emerging China is inevitable. And the Chinese believe that behind the Sino-Japanese row is a behind-the-scenes cold war between Beijing and Washington. In this scenario America is using Japan and other, smaller nations in the region to contain the fast-rising China as it would not be able to lead Asian allies unilaterally as it did during the cold war.

China's presence was nominal during the cold war, but it has since risen as a solid Asian power.

"As China rises, Japan flounders and the United States is overstretched, an intense security competition is under way in East Asia," Jin said.

Victory is always on the side of the big guns. These include literal guns and other armaments, economic might, cultural clout, patriotic conviction and pure aggression - all resources that win territories, as well as friends, and influence people around the globe.

This article appeared in the South China Morning Post print edition as: The treasured islands